Is an Income of 5 Lakh Tax-Free in India? Understanding Section 87A
Discover if an income of 5 lakh is tax-free in India and learn about Section 87A's tax rebate.
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As of the financial year 2020-21, an income up to ₹5 lakh is tax-free in India due to a rebate under Section 87A. This rebate ensures that individuals with a taxable income not exceeding ₹5 lakh get a full tax rebate of up to ₹12,500, effectively making their tax liability zero.
FAQs & Answers
- What is the tax exemption limit under Section 87A? As of the financial year 2020-21, the tax exemption limit under Section 87A is ₹5 lakh.
- How does the rebate under Section 87A work? The rebate under Section 87A provides full tax relief up to ₹12,500 for individuals with a taxable income not exceeding ₹5 lakh, resulting in no tax liability.
- Who is eligible for the tax rebate under Section 87A? Individuals with a taxable income up to ₹5 lakh are eligible for the tax rebate under Section 87A.
- Has the tax rebate limit changed since 2020-21? It's essential to check the latest financial guidelines each year, as tax regulations can change; the current rebate limit may differ in subsequent financial years.